Looking at the universe of stocks we cover at
, in trading on Tuesday, shares of Analog Devices, Inc. (Symbol:
ADI) were yielding above the 3% mark based on its quarterly
dividend (annualized to $1.48), with the stock changing hands as
low as $49.28 on the day. Dividends are particularly important for
investors to consider, because historically speaking dividends have
provided a considerable share of the stock market's total return.
To illustrate, suppose for example you purchased shares of the
S&P 500 ETF (
) back on 12/31/1999 - you would have paid $146.88 per share. Fast
forward to 12/31/2012 and each share was worth $142.41 on that
date, a decrease of $4.67/share over all those years. But now
consider that you collected a whopping $25.98 per share in
dividends over the same period, for a positive total return of
23.36%. Even with dividends reinvested, that only amounts to an
average annual total return of about 1.6%; so by comparison
collecting a yield above 3% would appear considerably attractive if
that yield is sustainable. Analog Devices, Inc. (Symbol: ADI) is an
S&P 500 company, giving it special status as one of the
large-cap companies making up the S&P 500 Index.
In general, dividend amounts are not always predictable and tend to
follow the ups and downs of profitability at each company. In the
case of Analog Devices, Inc., looking at the history chart for ADI
below can help in judging whether the most recent dividend is
likely to continue, and in turn whether it is a reasonable
expectation to expect a 3% annual yield.
According to the ETF Finder at ETF Channel, ADI makes up 4.64% of
the PowerShares Dynamic Semiconductors Portfolio ETF (Symbol: PSI)
which is trading lower by about 0.9% on the day Tuesday.
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